Mother (still) board Success in India

The growing segments of HTPC (home theatre PC) users and enthusiast gamers have injected a fresh life into the motherboard (MB) segment. The Indian motherboard market is growing very fast, especially now in the high-end and enthusiast segment as well as gaming motherboards. The benefit of great architectural changes delivers features like DirectX 10 or SLI to the motherboards which are in high demand in India. One can see a transition of a standard motherboard to units that deliver more possibilities to expand, and companies are making these products available to this region.

Vinay Shetty, Business Manager – Components, ASUS (India), says,–“In India, the motherboard market is spreading from A and B class cities to the C / D and E class cities. It is a lot more promising and every month or quarter we see the affirmation of the belief that this is a growing business with positive numbers coming up.”

Rajan Sharma, General Manager – MB and VGA BU, Gigabyte India, says, “The current market for motherboards is extremely growth oriented, especially for vendors like GIGABYTE which have already established required infrastructure in place to manage Channel Sales, Distribution Partners, Post-sales and Technical support.”

Kapal Pansari, Director – Marketing, Rashi Peripherals Pvt. Ltd., adds, “The most surprising change in the Indian IT industry is that this year the Desktop market has grown more than expected and the Notebook growth has slowed down due to factors like high repair and ugradation costs and 1–2 years of product life. Moreover, the attach products for Notebooks is also very high compared to a desktop. Therefore, the overall motherboard market is showing signs of healthy growth.”

Types of Motherboards 
There are more than hundred types of motherboards available in market. But technically speaking there are basically two types of motherboards – Intel processor-based and AMD processor-based (these processors can be Single Core, Multi-core or Workstation/ Server range).

Under these two broad heads, the motherboards can be further divided into the chipsets these motherboards use like Intel / NVIDIA / VIA / SIS. Further, these motherboards are divided into the specifications and the technology they can support like PCI x E, Wifi, SLi, IEEE support, Crossfirs, HDMI/DVI, Firewire, eSATA or SATA ports, LAN, Express-gate, EPU, sound and graphics, etc. For example, a home user may buy an MB with HDMI and SLi/Crossfire technology with multi-core technology for gaming use and to watch HD movies.

  Sandeep Sharma, Vice-President – India Operations, Kobian Pte Ltd., says, “Talking of chipset motherboards, the major share is of the Intel chipset boards, followed by NVIDIA chipset (in both Intel and AMD compatible segment). SiS chipset has been able to sustain with a very small pie in the market share in terms of numbers and revenue. On Intel platform, 945GC Chipset solution is the mainstream model. This chipset has been announced EOL and has been replaced by Intel G31 Chipset. G31 Chipset performance is much better than 945 platform boards and is the ideal board for Intel Core 2 and Quad core CPU. Nvidia chipset MCP73 is also catering to mainstream channel market where consumer wants a GeForce Graphics and PC usage is more for gaming and videos. On the AMD platform, Nvidia-based chipset boards MCP61 and MCP68 are the major movers.”

ASUS has over 70 SKUs to offer in the Intel and AMD platform ranging from the P45 / X 48 / X 38 to AM2 and AM2+ varied chipset from AMD / Intel / Nvidia / SIS.”“Name it and we try to pack it with features that are going to benefit the user; be it most basic technology like My Logo to newly-launched technologies like EPU or Express gate where saving power or getting online instantly is addressed,” informed Shetty.

Growth Drivers 
For the common man, the shift in the use of a PC from being a technology gadget to something that he uses for his daily activities of communication and entertainment can be considered as the verticals that drive the motherboard market. The first time buyers of computers are or want to be familiar with the PC through desktops. Gaming, DIY, SOHO, SMB are some of the verticals which are part of the assembler segment currently driving growth of Motherboards.

CarstenBerger, Marketing Director (EMEAI), ZOTAC, informs, “We consider three types of verticals that are growing fast in the motherboard industry. The first one is the so-called SOHO where users are in need of a media entertainment PC for which he needs a proper combination of motherboard, graphics card and CPU. These entertainment PCs are dedicated for HD playback and Internet broadcasting, information-based items. The second vertical is a gaming and performance system where end-users experience new games, new quality of graphical features and also online multiplayer communities. The third vertical is a corporate one, right now especially in the government sector. There is a lot of request in very small form factors for mini PC systems, where we deliver a full performance integrated board in mini-ITX form factor. This segment is increasing rapidly.”

Vinit Shangle, National Sales Manager, Simmtronics Semiconductors, adds, “The SOHO and SME verticals will keep driving the growth of Motherboards. One more vertical that will fuel the demand is the ‘REPLACEMENT’ or the ‘UPGRADATION’ vertical. This vertical will add to at least 20 per cent of the overall growth of motherboards.”

Vendor Opportunity 
India is the land of opportunities for vendors. It’s only proven by the fact that every year new vendors are making their way to India and those already present do things to improve their customer satisfaction. It’s a competitive market and all are going to benefit from the booming trend. Consumers and Channel are becoming more aware of the new technology and features. However, vendors must focus on high quality and good service that delivers low TCO. On that ground, low-quality products will not sustain. New and innovative technologies will bring more and more opportunities in India.

Rajan Sharma informs, “The non-Metro region sales is currently biggest opportunity for vendors, as the next phase of growth for DIY segment is coming from small and medium size cities.”

Agrees Sandeep Sharma, “Opportunities these days need to be recognized with respect to each region, as per the geographical spread of the country. Every vendor needs to move on keeping a balance in the ‘Depth’ and the’‘Breadth’ model of sales approach. This is again region specific. There are sizable SIs (termed as small SIs in respect to the market share) in almost every region in certain pockets who need constant handholding and financial versatility from the vendor, and the numbers one can get from them in totality is sizable enough even if 30 per cent of such SIs prefer your brand. OEM selling is another big opportunity if the vendor can be consistent enough and be patient enough to fulfil the requirement as per the OEM specs required. Educating the reseller SIs wherein they can sense better returns for an improved performance in a variation of the running SKU is another opportunity which the vendor can encash.”

Reseller Opportunity 
Resellers have been the most adaptive of the entire channel funnel and it’s their contribution and effort that’s giving a facelift and positive signs of this growing market.

Resellers also stand to gain from this line of business. They will have to be linked with one of these serious brands and make money selling the motherboards. One word of caution for the resellers is that they should avoid the temptation to sell the cheap brands from “fly-by-night” operators. They may make more money at the time of selling but at end of the day they lose much more when warranties are not offered by such brands/vendors.

Adds Sandeep Sharma, “I would like to rephrase the term VFM as MVSFM (More Value for Same Money) as the opportunity for resellers. Resellers with strong financial backup can also encash the EOL (End of Life) product stock and sale opportunity. 945 GCM is virtually over and partners who could foresee the trend have cashed on the same. Educating the SI on a better performing variant of a running model would give them a better margin. All the above are ‘top-line’ opportunities for the resellers and are more practical to encash.”

Informs Pansari,”“The growing market in India is a positive and healthy sign for resellers. Resellers must keep up-to-date knowledge of the changes in the technology and they will continue to drive the market for the future. They are playing important role between distributors and SIs/end-users.”

Channel Sales Programme being offered by Vendors 
Informs Shetty, “All through the year, we always find ways and mechanisms to reward our partners who devote their time and mindshare for ASUS business. At ASUS, every sales programme is designed especially for our loyal partners. These programmes can be called special because they are for our special partners and the trend will always keep getting better for Loyal Partners.”

Berger says,”“We are running various channel programmes to help the customer understand our benefits. Our most recent channel promotion programme ended on 30th September and was carried out through one of our great distributors called Tirupati Enterprises. We plan to execute more promotions like this since the feedback was simply amazing for all three parties.”

Shangale adds, “SIMMTRONICS keeps running various programmes throughout the year for the partners so as to keep them excited and linked with the brands. Some programmes run over the past few months were ‘BEAT THE HEAT – MAURITIUS STYLE’, ‘MONSOON MAGIC-2008’ and’‘OLYMPIC MANIA–2008’. We offer cash rewards and overseas trips against these programmes.” “We have our regular quarterly channel promotion called GCIP–GIGABYTE CHANNEL INCENTIVE PROGRAMME, wherein we reward, encourage and appreciate channel performances,” adds Rajan Sharma.

Sandeep Sharma says, “Kobian has been consistent in introducing one channel programme after the other to ensure better incentives for the partner throughout the year. This has been across product lines. Consistent partners have always been rewarded and will always be taken care of as we at Kobian strongly believe that to stay consistently on the top of the chipset board market we need to have our feet firmly on the ground and understand the pulse of the market movers in the channel. Our handpicked sales team across India has proved this true time and again.”

Go-to-Market Strategy adopted by Vendors 
Zotac is one of the top AICs of NVIDIA and is expecting a significant volume on motherboards in India. It is eyeing 25-per cent market share in NVIDIA platform motherboards by the year 2009. Berger says, “Our go-to-market strategy is very clear: We want to grow together with our partners while educating them on new technologies, introducing new products as fast as possible (of course, we are not compromising quality and liability), providing many different solutions for his success. And the last part is to give proper support on sales with information and comparisons, promotion and of course after-sales support.”

SIMMTRONICS is currently doing an average of 15–18K motherboards per month. Its main focus is on NVIDIA chipset-based motherboards which currently make almost 70 per cent of its total volumes.–Shangle says, “We have opened 11 direct sales and support offices in the last seven months. We have almost 800 Direct Billing Partners (DBPs). We don’t work on a National Disti or a Regional Disti Mode. We believe in directly selling to these DBPs, thus reducing the margin of 1 tier from the sales price making the price more competitive.”

Sandeep Sharma, “Focus on C and D class locations is the basic strategy for the next two quarters. ‘Depth’ approach in bigger metro type markets and ‘Breadth’ approach in smaller markets is what we are working on. We are half way through our series of events we have branded as ‘Mercury Yatra’ with the focus on the abovementioned markets. The whole idea is to educate the partners about the upcoming trends, market trends and our focus. We have been more than successful so far and are upbeat about the approach.”

Upcoming Trends 
The desktop market is growing which is spurting the demand for MBs. There will be a strong growth in the Notebook segment as well where there will be an exponential growth. Besides, the new MBs now have a lot of additional features including onboard Graphics which is creating increase in replacement demand.

The vital change will come from players who could pack more features to their SKUs and also green IT or less power consumption component will grab a lot of attention.

Berger adds, “We believe that education on the products and technologies is the way to grow the market, realizing upcoming trends for advance technologies, like gadgets, HTPC and media centre PCs and delivering these products to the market to realize new possibilities. We have all kinds of solutions for all these areas and this should be the base for any customer to grow their own business.”

With overall increase in knowledge and information base, more SOHO customers will prefer DIY to fulfil gaming, designing, Internet commerce needs. Sandeep Sharma says, “Technology has witnessed major changes in the last two quarters with the introduction of high-speed and performance Core 2 and Extreme processors and also the launch of a low-power entry-level solution from Intel ATOM.”

The main desktop market shall witness G31 as mainstream and G45 and P45 as high- end models. The launch of X & Q series in India shall take some more time. On the AMD platform, MCP73 shall be joined with MCP7A supporting DX10. ATOM solution shall create the new trend of Nettops which hopefully should reach to the C & D class cities and provide them the basic PC solution.

The market shall witness a growth in both high and entry segments as for the first time the solutions for each segment are very clearly demarcated and have been addressed accordingly.